Commonwealth Superannuation Corporation Annual Report 2017–18

7. Our Superannuation Schemes

PSSap

Public Sector Superannuation accumulation plan

Overview of PSSap

PSSap is a scheme in which members and employers pay money into the fund, and investment returns are calculated as a compound average rate of return after fees and taxes have been deducted. It was established on 1 July 2005 by the PSSap Act. PSSap is open to eligible employees of participating employers who contribute 15.4% per annum on behalf of their employees. Since 4 December 2017, certain members have been able to contribute to the scheme after leaving public sector employment.

PSSap also offers an ancillary membership to eligible CSS and PSS members who can make additional contributions and transfers, and an account-based pension product known as CSCri (Commonwealth Superannuation Corporation retirement income) to eligible public sector scheme members.

PSSap membership

Table 27. PSSap members over five years

	2014	2015	2016	2017	2018
Contributors	83,155	82,495	88,966	98,775	101,473
Preservers	46,957	46,631	43,071	36,317	34,930

Note: Figures are at 30 June of each year; ancillary members are not included.

PSSap administration

Member contributions

PSSap contributors can make before- and after-tax voluntary contributions.

Figure 15. PSSap member contributions over five years

Note: The above figures are related to PSSap ordinary members only. Ancillary and Extension/Choice members have been excluded.

Ancillary contributions

Ancillary contributions can be made by contributing CSS and PSS members who also join PSSap to build a separate superannuation benefit. Their PSSap benefit has unit prices applied in line with the investment returns of the scheme and their PSSap benefit does not affect their CSS or PSS benefit in any way.

Ancillary memberships have been available since 1 July 2013.

In 2017–18, almost $93 million in ancillary contributions (in the form of salary sacrifice, personal (after tax) contributions, spouse contributions, and super transfers) were made – compared to $130 million in 2016–17.

Employer contributions

PSSap members employed by a participating PSSap employer receive 15.4% employer superannuation contributions. PSSap members not employed by a participating PSSap employer receive contributions at the current Superannuation Guarantee rate.

Figure 16. PSSap employer contributions over five years

Benefit payments

The two most common reasons for the pay out of superannuation benefits from the PSSap fund are for retirement and to consolidate funds into another superannuation fund.

Table 28. PSSap withdrawals

	2016–17	2017–18
Total withdrawals ($m)	448.275	501.165

CSCri

CSCri is an account-based pension product offered to public sector scheme members.

Table 29. CSCri members over five years

	2014	2015	2016	2017	2018
Members	181	441	777	956	1,175

Note: Figures are at 30 June of each year.

Lump sum amounts can be rolled into CSCri which generates regular income payments to members in retirement or in their transition to retirement.

Table 30. Amount rolled into CSCri

	2016–17	2017–18
Total roll-ins to CSCri ($m)	107.050	108.490

Table 31. CSCri pension payments and lump sum withdrawals

	2016–17	2017–18
Payments and withdrawals ($m)	79.964	64.361

Insurance benefits

Eligible PSSap members automatically receive cover for death or total and permanent disability (TPD), as well as income protection cover. This insurance cover offered through PSSap is called lifePLUS. Members can apply to vary, increase, decrease or withdraw from their lifePLUS cover.

lifePLUS offers both lifePLUS auto cover and lifePLUS choice cover. lifePLUS and all other insurance cover for PSSap members detailed in this report are provided by AIA Australia Limited (ABN 79 004 837 861, AFSL 230043).

Death and TPD

lifePlus provides a lump sum payment in the event of death or TPD. The level of cover varies depending on a member’s age, unless a member has fixed cover in place. If a member has fixed cover in place, they receive the same level of cover until that cover ceases or until the member withdraws from that level of cover.

Members can select insurance cover for both death and TPD, or for death only.

Table 32. TPD claims in PSSap

	2016–17	2017–18
TPD claims assessed	143	84

Income protection

Income protection insurance provides a monthly income stream, paid in arrears. The income stream provides (by default) 90.4% of an eligible member’s base salary. Seventy-five per cent of this amount is paid directly to the member and 15.4% is paid into the member’s PSSap account for up to two years; 65.4% of a member’s base annual salary is paid for a further three years.

If a member is unable to return to work because of disability caused by sickness or injury, 50% is paid directly to the member and 15.4% paid into their PSSap account.

Table 33. Income protection claims in PSSap

	2016–17	2017–18
IP claims assessed	253	373

Complaints

Table 34. Complaints received in PSSap

	2016–17	2017–18
Complaints received	243	273

All complaints were resolved by 30 June 2018. Most complaints related to insurance.

Table 35. Complaints received in CSCri

	2016–17	2017–18
Complaints received	27	10

All complaints were resolved by 30 June 2018. Most complaints related to communication between CSC and the complainant, or to the taxation of superannuation income streams.

Changes to PSSap’s legislation and trust deed

The Superannuation Amendment (PSSAP Membership) Act 2017 made amendments to the Superannuation Act 2005 to allow former members of PSSap who leave Commonwealth employment to continue as contributory members of the scheme, known as ‘former Commonwealth ordinary employer-sponsored members’. Consequent to these reforms, the Superannuation Amendment (PSSAP Trust Deed-Membership) Instrument 2017 has amended the PSSap Trust Deed and Rules.

The Superannuation (PSSAP-Former Commonwealth Ordinary Employer-Sponsored Member) Determination 2017 was made by the Minister for Finance in October 2017 to preclude those holding some Commonwealth offices from becoming ‘former Commonwealth ordinary employer-sponsored members’ of PSSap, which brings it into line with pre-existing PSSap membership rules.

All the above changes took effect on 4 December 2017.

Also, in February 2018, the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018 was passed by Parliament which amended the Corporations Act 2001 and repealed the Superannuation (Resolution of Complaints) Act 1993.